Tip pressure might work in the moment, but customers are less likely to return
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This makes for an uncomfortable situation where I now have to ask the waiter or bartender if they receive this as a tip. Then I need to decide if I want to tip something like 5% to 7% extra, which would be a good 25% tip in total, but looks like a crappy 5% tip.
So after dealing with that, I just don't go back to those pubs or restaurants.
There was one bar where the waitress told me she doesn't get that service charge. It just goes to the house. So if she was telling the truth, all of the prices on the menu are just a lie.
Asking $11 for a burrito was already iffy and by then I'd started to curtail fast food purchases. I can't even imagine paying an 18-20% fee that isn't meant to be the entirety of the tip.
That's not far off from what the merchant is losing for credit card customers, so their options are:
1. Charge the same for credit cards as cash, and make cash paying customers effectively pay more, thus applying a regressive tax to the poor (who are less likely to have credit cards)
2. Charge more for the credit card paying customers, and they can avoid this extra payment by paying with cash.
2 is obviously better, and I would rather go to stores that take 2 than ones which choose to charge everyone more, effectively to the detriment of those worse off.
-Count cash drawers in and out for every employee, every shift
-Count cash payments received & change returned
-Prepare daily bank deposits
-Take daily bank deposits to bank, get more change
I couldnt say exactly what percentage all of that adds up to, but I could see it being 3% or maybe even more.
So they could already be "saving" up to 10% or more on cash customers...
Cash isn't a solution.
you wanna charge customers for electricity too? what’s that - like 1% more? uniform / apron cleaning - 0.12%? anything else? :)
Yes, the store should be charging enough to its customers that it can afford electricity, and if it can't afford electricity, it should increase its prices. It's not worth trying to account electricity use per-customer though, obviously, and it typically won't really vary by customer much anyway.
Credit card fees on the other hand do vary by customer, and can trivially be attributed to a single transaction accurately.
if you want electricity, you call electric company, turn it on and you get a bill for usage.
you want the priviledge of using visa at your store, you call them and get it all setup and and then you get a bill for this.
it is cost of doing business and you can’t pass that shit off to customers
If you run a cafe, and one customer orders an espresso and the other orders a latte, are you not allowed to charge them differently?
Buying milk to make lattes is also a cost of doing business, but it's a cost that is only driven by people who buy lattes, so you pass the cost of milk on to latte buying customers and not espresso buying ones, right?
Credit cards are the same as milk here, only people using them cost you money.
Should all foods and drinks in a restaurant cost the same because otherwise you're passing on the cost of buying ingredients and staff labor, i.e. "the cost of doing business" on to customers unevenly?
so let's try again - I am buying a product or a service. It is exactly the same product, same "milk" if you will :) now the business is telling me that based on the method of payment I choose (who the F carries cash around in 2024/25...) I will be charge _different_ price for the _same milk_? that ... makes absolutely no sense.
of course the business itself can choose to charge me extra 3% if I pay with Visa or 15% if I bring a goat to barter with but of course I am going to pick my ass up and head on over to a competitor who won't charge me 3% or 15% extra
If a business doesnt pass on its costs of doing business to customers, they will go out of business. The cost doesn't need to be passed on as a fee or surcharge, but it does need to be passed on.
Would you stick to your guns and say that cash users have to subsidize expensive wire fees? Or is that too much, and the fairness ends at subsidizing the expensive credit card fees? If so, why the distinction? If you could pay by bitcoin, should cash users pay the bitcoin transaction fees too? :)
Also, do you really think 3% is a fair tax on the entire economy that we should be giving to the duopoly of MC/Visa, when they only charge 0.3% in most of the rest of the world? The only reason they charge so much here is because they can get away with gouging due to our non-functional regulatory environment. I don't know why so many people accept 3% as a law of nature or something when the cost of handling cash is far less than that.
amazing people here don’t understand that there is a cost of running a business. you don’t want to pay Visa 11% - don’t. you don’t want to pay apple 30% - don’t make ios apps. it is that simple mate
How do you feel about shipping options then? Should Amazon charge the same for 5-day ground as they do for overnight shipping?
this has nothing to do with shipping options. you cannot charge me money for using a credit card mate, it is 2024 (soon to be 2025).
[0] https://staxpayments.com/blog/credit-card-surcharge-guidance...
1. Visa/MC should be allowed to overcharge and we should all accept it because Visa/MC said so in their contracts.
2. You like using credit cards, and things that you personally like should be free in 2024, and other people should pay extra to subsidize your personal preferences.
I'm not convinced. I don't think your personal preferences will be enough to reverse the trend of businesses charging fair prices for different payment methods either. But you're welcome to try.
2. never said that. usage of credit cards should 100% NOT be free. the businesses should however offer it and pay whatever that costs
So, in other words, you're in favor of a minor tax on those worse off than you, with poor credit score or otherwise can't get a credit card, so that you don't have to think about how your credit card company is ripping the merchant off.
If the business doesn't write that "3% for credit card users" down, and 90% of their customers use credit cards, their logical next step is to instead increase the price of all items by 2.7%, which lets you save a minor amount of money by screwing over those who are worse off.
If you just actively want to worsen the life of poorer people for your own benefit, well, I guess you're at least on the right site for it. May I recommend applying for the YC spring batch.
ugh I am not saying any of this... if you have cash - pay with cash. I do not want to get a benefit for paying with a card (though of course more and more places do not even take cash any longer) and when I say card I don't mean actual credit card, debit card works just as well. just don't charge me any different
> If the business doesn't write that "3% for credit card users" down, and 90% of their customers use credit cards, their logical next step is to instead increase the price of all items by 2.7%, which lets you save a minor amount of money by screwing over those who are worse off.
This is their problem, not mine. If they want to charge extra - that is fine. I won't pay extra. If every business charges extra than I won't have a choice but as long as there are places that don't I am spending my money there.
> If you just actively want to worsen the life of poorer people for your own benefit, well, I guess you're at least on the right site for it.
Where are you getting this from? why am I worsening life or poorer people?! What if a poor person does not have any cash on them but has a debit card - we gonna punish them for not carrying cash around?! It seems like you are arguing the opposite here or just assuming poor person = I carry wads of cash with me everywhere...?
Yes, it's a cost you pay at some places to do business with them using your credit card.
> it is cost of doing business and you can’t pass that shit off to customers
What do you think prices are? They are the costs to the business plus some profit margin. Visa is passing their costs down to their customers too.
Businesses are completely within their right to pass the CC charges on to customers. It becomes the customers’ cost of doing business with their preferred method of payment.
The food ingredients, the building rent, the electricity and cooking gas, those are all required to make the burrito, every burrito.
The credit card exchange fee is like chocolate sprinkles on ice cream. It's a completely seperate and optional thing. This totally seperate company offers an extra service you may or may not want to add on top of your burrito.
That's nothing at all like the electricity, and is not at all part of the cost of doing business. It's the cost of doing an entirely seperate business.
But also I don't understand why a cash customer paying the same price as a credit card customer should be considered paying more. The customer only cares how much they have to pay, they don't care about or feel entitled to a constant profit margin.
Would a customer paying cash ever switch to credit card just because they've learned the business profits more from the cash sale? No, of course not.
The credit card customer gets rewards often amounting to around 2% of the value of the item.
Those rewards come out of the money the merchant is paying to the credit card company.
The cash customer did not get those rewards, and so paid more.
Things may have changed in intervening years but about 20 years ago I owned some quick serve restaurant franchises, and the credit card companies banned charging a fee to customers for use of credit cards - there was essentially a most favoured nations clause in the agreement. If you were caught doing this they would terminate your service permanently.
[0] https://staxpayments.com/blog/credit-card-surcharge-guidance...
(Also, no tipping in New Zealand, except for a few restaurants close enough to the cruise ships that they think their customers won’t know any better).
The only exception would be if it was misrepresented as a tip, or tax (Telcos used to do that one, phrasing their fees as taxes, to the point that "you are not allowed to call a charge a tax unless that charge in its entirety is going to a governmental entity").
It's really tiring to know that there's no legal recourse for what is obvious and normalized fraud when law enforcement receives budget increases year after year.
Whatwouldyousayyoudhere.gif
Far more common here are ~3% "kitchen appreciation fees" that get paid directly to the kitchen staff. I'm AOK with these but some people really complain about them.
Assuming the service charge was even 15%, for it to be $100 more than you thought it would be, your bill would be $600+ (simplifying for taxes)...
I don't go out for $600 dinners that often, though I have.
And that being said, I do think tipping does bring out some less sensical practices - why should the server get five times more for serving me a single bottle of wine if the wine was $100, versus $20? It was still a single bottle of wine.
The last time it happened was ~300 + 20% service charge + a tip that'd have been in the low-mid 20's. That works out to be a bit under $100. It started to bug me on the walk home, and I double checked the receipt. I don't like scrutinizing receipts but I've started to do it a bit more.
> why should the server get five times more for serving me a single bottle of wine if the wine was $100, versus $20? It was still a single bottle of wine.
The argument, which one can choose to agree with or not, is that the kind of place where one is buying a $100 bottle of wine has a higher degree of training, care, etc involved.
What if the restaurant serves both $20 and $100 bottles? Do they adjust the quality of service on the fly to make pouring the $20 bottle profitable? Offer extra labor-intensive services only available with the purchase of the $100 bottle?
It’s annoying because they could price it in up front. A restaurant bill looks like a utility bill these days with all of the line item charges, just include the damn fees in the price of food!
I am 100% opposed to this. It's manipulative at best. The right way to do it is to pay the staff more and increase the prices. At least that would be upfront and respectable.
Jesus. Please don’t. Tipping 25% is absurd. Don’t normalize this.
I always thought that economy of scale makes it cheaper to process big orders in batch, but apparently I'm wrong
And to name and shame them for my Canadian compatriots, it was the Great Canadian Oil Change chain.
I don't even ask. If it looks like a tip and is computed like a tip, it is one. How the owners and workers hash out their payment structure is none of my business as a customer.
"Tips as gifts" does work in situations where there is no establishment. For example, musicians on the street with a tip jar.
I 100% agree that tips should be abolished and consumers should pay a clear and fixed price for goods and services, but if you accept that that is not an option, then "service fees" actually make sense. That being said, I can understand the ire that they may cause the wait staff, since many consumers may think those "service fees" are tips, and as a result, may not receive anything for their work. No great solutions here
I've yet to come across it. But when I do, I will refuse to pay it and I will also refuse to leave any tip. And I will never return.
I'm not against paying reasonable wages, but that should definitely be, you know, part of the actual menu price.
/s
It’d be neat to see a campaign to popularize a term like “final price” or “all-in price”. It’d encourage the creation of products that always show the right price even as taxes change. And consumers would be empowered.
Other countries handle this fine. It really isn't any more complicated than properly collecting the sale taxes already. Just decide the price of a thing and add the tax then show the final price. You could also, which is something I saw done in Japan, show the Tax Free price so it's easier to compare.
But I kind of don't buy that it would actually much harder than any other hard thing supermarkets do to put the full price on a jug of milk or etc.
Of course it does. Seeing this excuse in 2024 is absurd. It has nothing to do with actual difficulty, businesses just don't want to have to do it.
Businesses should be required to say in general advertisements "product/service is $X + local applicable taxes". When you go to make your individual purchase they would then be required to show the actual total price you will be paying. Maybe include a breakdown if people want it.
Creates a burden for businesses to comply? Too fucking bad, that's the cost of being allowed to do do business.
it's 2024 man, there are computers that can calculate this. Most retails update tags weekly anyway; literally just a stockboy swapping tags out. Tax laws don't change that much.
Walmart and other stores have been experimenting with electronic tags that change price based on demand and time of day.
Like, the Australians do it and it works just fine. Price says $5.50 AUD and when you rock up to the counter the price is 5.50.
Not only that, but they obviously already have those laws implemented. How else are they going to charge you?
Though that never ending fountain of new money being handed out to banks and other centralized entities to create an inflation treadmill that destroys people's ability to interact with the market in a deliberate manner (eg investigating how a restaurant handles tips before going there, or spending time choosing a different restaurant if the first one is not transparent). That treadmill is definitely not to be considered government meddling, somehow.
It's always been that way in the US so we've come to expect it. It's a bit like 20% of that sales price Europeans pay is VAT.
But I can attest that if I’m forced to tip, I’ll not return to that establishment.
The mental block can be helped a little by adding 1/3rd to all the menu prices as you read them.
To be clear, I am promoting eliminating tips, and paying everybody in the lower 90% of wage earners more for their work. I have no interest in shortchanging waiters.
Someone please correct me if I'm wrong, but the bigger tax that's avoided here is corporate taxes, I think. The tip goes directly to the employee, and it's thus not taxed as corporate income, is my understanding.
EDIT: Ah, I missed that corporate taxes were on net earnings rather than gross, so this wouldn't make any difference. Thank you!
This isnt true in Alaska, California, Minnesota, Montana, Nevada, Oregon, or Washington.
And in the states where it is true, the employee is still required to be paid at least the full minimum wage inclusive of tips.
Just add 15% to the price. If you pay with credit card, you just write it on the field on the receipt. No words need to be said.
It's standard to tip 15% for decent service in a restaurant(sans win). You are of course free to tip more for good service or less for crappy service, but unless your experience is truly exceptional (in either a good or bad way) you can never go wrong with 15%. This is standard any US restaurant where you sit down and are served by a waiter or waitress. You are never "forced to tip", but you will be universally looked down upon in any sit-down establishment that you fail to tip in, so you might be best off not returning.
This is not true, and hasn't been for some time [1]
[1] https://www.researchgate.net/figure/Average-reported-tip-rat...
The 15% standard supplanted the previous 10% standard somewhere in the 1970s and lasted to the early/mid-aughts depending on where in the US one lived. I don't agree that ~30 years is "many decades-long". Further, that 15% itself was an uptick from the prior standard demonstrates that we're dealing with a moving target, for better or worse.
On the other hand, I find delivery services quite reasonable. They tell me the total price (including the expected tip) before I order. You rarely see that kind of honesty in an actual restaurant. And I don't have to see the person I tip, which makes the experience much less awkward.
Also, tipping is a monument to human stupidity. Apparently, people would rather pay €10 + 20% tip than €12 with no tip, because the former feels cheaper, even though it's a stupid way to organize pricing.
The only situation where there is an unwritten expectation for a tip is at a sit-down restaurant with waitstaff and for food/grocery delivery. These are luxuries 99% of the time.
In all other cases that I know of, they will ask you outright if you want to tip. For example, when I get a haircut or a massage, they ask me explicitly if I want to tip, and, because it was a personalized, intimate, luxury service, I oblige. For simple walk-up services like coffee or take out, I wouldn't tip.
The only other times I tip are for exceptional service (e.g. in a fastfood drive through) or if it's a local business that I'm fond of.
But at checkout for carryout orders the card terminal also now opens a tip menu. I would never tip on this screen because the employees are already paid a true hourly wage, albeit a low one, not a server rate that is below minimum wage.
Furthermore there is no way for the customer to know if the employee they are tipping is even one of the bottom paid line cooks or a manager or driver who are already making $20/hour at my restaurant—what most servers make after tips. I am a driver and sometimes accept payment for carryout orders and end up receiving credit card tips that should really go to the line cooks. When we aren’t busy I make an effort to reach over and click “no tip” for the customer, as checkout employees at other restaurants sometimes do for me, but sometimes it’s busy and I get tips anyway.
As others have said I think doing away with tips altogether would be best but it seems unlikely that will ever happen. A compromise would be to somehow ban “customer facing” tipping for things other than delivery—no tips at cash registers, only for “pay at the table” establishments.
The business should own the cars and pay for the fuel. Or they need to be at least compensating drivers by the mile at the current IRS rate. Especially considering Dominos charges a delivery fee. Where is that going to if not to the drivers?
Not my problem
however, since most people are tipping the ones that don’t are as the assholes :)
FWIW, I always tip 20% because that's the society I grew up in, but it always leave a bad taste in my mouth when I'm not exactly sure what I'm tipping for, my wage has been stagnant for several years and all of my own costs are going up. Ultimately it just leads to me going out less, which I think is a net negative for my local service economy. It's hard to justify $20+ for a single meal when I easily can turn that into 4-5 meals at home.
[1] https://www.dol.gov/agencies/whd/fact-sheets/15-tipped-emplo...
I don’t think claiming the mileage fully recoups those costs.
Tipping at terminals is going to happen the same way. The idea that some minimum wage person is gonna recognize you, let alone still working at these places will key you in on this is just something that will go away.
Tip at a sitdown restaurant, that's normal. Tipping at a terminal for takeout, screw that.
Notice that those are just round numbers rather than specific values. What happens when inflation means that $10 is no longer sustainable for a meal? You can either increase the price and weather all of your regulars complaining, and new customers viewing you as an expensive location. Or, you can cut costs.
The same applies if you have a sudden new expense. Say, taxes go up. Or you decide to stop requesting tips and start paying staff a living wage (something I'm strongly in favor of). Then you'll need to increase all prices by 30%. Do you think your customers will be happy? No way! And even those customers who do support and agree with you, subconsciously they'll still be comparing you to other places that haven't done this and your place will be comparatively expensive and they'll come less often. Yes, even if they end up paying less after factoring in tips. Customers (in general) are not rational that way.
Then the only option is legislation so that everywhere changes at once. And good luck with that!
"Loyalty coupons" where the number of items bought to receive one free escalated on subsequent purchase? Stopped shopping at that store. I'm not someone's Skinner Box experiment.
Websites with increasingly user-hostile experiences (or moderator-hostile), o hai reddit and googs, yeah, eff that noise.
Manufacturers selling shoddy products and failing to support them? Bad reviews and shop elsewhere (though that's often quite difficult).
As the poet notes, "Rage, rage against the dying of the light."
<https://www.poetryfoundation.org/poems/46569/do-not-go-gentl...>
(Dylan Thomas, whoever he was: <https://genius.com/Simon-and-garfunkel-a-simple-desultory-ph...>.)
I suspect metrics show benefits amongst those who tolerate such abuse. I'm curious how well exits are measured and assessed.
A.O. Hirshcman, Exit, Voice, and Loyalty: <https://en.wikipedia.org/wiki/Exit%2C_Voice%2C_and_Loyalty>.
A concrete example: a bakery near me uses the same POS terminal for both cafe sales and bread sales, meaning I get asked to tip on loaves of bread. I've seen people get flummoxed and tip $1-2 on bread sales because of this.
If you have a Walmart+ membership ($98/year or $12.95/month) you get free home delivery on grocery orders of $35/month or more, and tipping is handled just like most delivery services--you don't have to but most people will feel guilty if they don't.
But if you add the Walmart InHome add-on to Walmart+, which adds $40/year or $7/month, then the delivery people are not allowed to accept tips. If you want to show your appreciation Walmart says you can leave a note or comment on your delivery survey.
Note that if you just have groceries delivered once per month, and order the minimum amount for free delivery ($35), and leave a 10% tip (the minimum most people who tip out of guilt will probably leave) that will come to more than $40/year in tips so InHome might actually be a decent deal.
BTW, it is called InHome because no tipping is not actually the main point. The main point is that instead of just dropping your delivery off outside they will put it where you want, including inside your house. They will even unpack it and put things away in your fridge and cupboards if you want. I think I'd find that kind of creepy because I really don't like other people in my home, but I can see how some people could find it useful.
I have no problem tipping in the moment. And sometimes for very different amounts than expected. But if you expect a tip and didn't earn it...?
Tips are absolutely not mandatory in France. You pay for what you order at the price you see on the menu and nothing more. Small tips are appreciated but not expected. I am French, I have eaten in many restaurants of all kinds and I have never been asked to tip and I tip only occasionally. As for surcharges, they sometimes happen, for example if the restaurant is part of a club and you are not a member, but never at regular restaurants, it may even be illegal.
I am sorry for your experience, they probably noticed that you weren't a native and attempted to trick you. Was it in Paris? It seems like such unacceptable behavior is more common in Paris.
Note: I interpreted "mandatory tip" as having to pay a surcharge. Of course, part of the bill goes into paying the waiting staff, but it shouldn't appear on the bill, that part is between the employees and their boss.
I've witnessed multiple businesses switch to Square and the suggested tips skyrocket. I don't know if it's a default or just a coincidence.
What do you do if you don't want that review tied to your account/identity, or prefer the fact that you've gone to that establishment to not be published to the whole world?
Tipping was already an obnoxious aspect of US culture before, and it has become much worse. Increasingly, it's just not worth putting up with it.
It has gotten so out of hand that I think a USP for a new or existing restaurant would be to advertise as a no tipping establishment. Pay your employees a fair wage and adjust your meal prices accordingly. Who knows? It just might catch on.
Study 1a was done at a single brewpub, which uses 2 POS systems from the same provider, one counter-based and one hand-held. They say nothing about what kinds of customers or transactions get the hand-held (presumably table-side?) POS system instead of the counter-based one. Are these different group sizes? Different seating areas? Food vs not? It's not a random assignment? So (a) it's hard to know whether the effect is real in the one business they measured with or if it's just that different kinds of customers are more or less likely to return and (b) it's hard to know whether this actually generalizes to other businesses. What was the effect size? During a 1 year period, customers whose first visit used a handheld POS had 1.1 subsequent visits vs 1.46 for customers whose first visit (within the period) used a counter-based POS. They're grouping people by their first visit in the period, as if that's going to be determinative of how they think about the business, but they don't know which customers were actually new (i.e. one month before the captured period, did you go and use a hand-held POS and then in the 3rd month of their period you went and used a counter-based POS? You're in the counter-based group.)
All the rest of the 'studies' in their paper are market-research surveys.
Hang around Australian Reddit groups long enough and you'll see the occasional rant about it.
In a lot of cases, the vendor just enables tips and doesn't care to optimize.
Alternatively, you could always tip in cash or just not tip. I've never been in a situation where I've been forced to tip and I've eaten at restaurants at all ranges of quality.
[1] https://www.theregister.com/2024/09/07/uber_driver_waymo
If low-privacy tipping decreases loyalty, is it overall positive from the business’ perspective?
And let's be real, most customers aren't savvy enough to think about that ahead of time, which is why most restaurants that have attempting no-tipping systems in North America have failed (or reverted back to accepting tips).
There's also a segment of the population that enjoys the perceived power of holding a tip over an employee's head.
The first group likes to tell high-income service workers that their pay will go down without tipping, which is fairly effective at finding people to be the media front saying workers don’t want to get rid of tipping instead of the other 90% who are guaranteed to benefit.
No offence but you're kind of proving my point. I said nothing about a difference in pricing because there isn't unless you actually tip $0 (which statistically very few people do). $24 (restaurant includes tip in price in order to pay servers a fair wage) is the same as $20 + 20% tip.
Most of the rest of your comment is what I said with different wording.
> high-income service workers
There's very few high-service income workers. I served tables through university, even if you make $400 in one night there's not enough of those nights for you to be "high income". If you're a stellar server working full time you can maybe equal what an average accountant makes in a year (which is pretty mediocre), but with more stress.
> There's very few high-service income workers.
Yes, we’re in agreement? I was just referring to how the opposition here would trot out quotes from some bartender who makes $75/hour and not mention that they were the upper fraction of a percent and the median was considerably lower.
Of course it seems higher priced. That's the point. Perception. Seeming higher priced != higher priced if there's the expectation of tipping and you follow it, but the average consumer isn't very savvy so it ends up scaring them away. Which is why restaurants that try to include service in their pricing end up reverting or failing.
Also the only opposition is really from consumers (which then spills over to owners who get to hear all the complaints). Europeans get along fine with not tipping.
I wonder if this has changed as both prices and tip percentages have gone up. At $50/person tickets and a 20% tip, you'd only need to serve 100 people to make $1000 in tips. 100 people a night is unrealistic for many restaurants, but I'd think a server working full time could easily do a couple hundred customers a week which is $100k/year in tips.